It took 72 seconds to insure LSU's national title hopes on the sports prediction market. A third-party insurance company placed five trades on the prediction market Kalshi that could pay out $3 million if LSU wins the national championship this season, a Kalshi spokesperson confirmed to CBS Sports Tuesday. The number raised eyebrows this week when InGame, a publication covering sports betting and prediction markets, uncovered the trades, which match the exact cash figure LSU would owe coach Lane Kiffin in College Football Playoff bonuses if he wins the national title, according to a contract he signed in November.
The third-party insurance company, which Kalshi did not identify, purchased 837,500 contracts on LSU reaching the College Football Playoff, followed by contracts on LSU reaching the semifinals, the national championship game and winning a national title. Their last contract was on LSU reaching the quarterfinals. CBS Sports reviewed Kalshi's trade data and confirmed the five blocks in which the buyer paid $662,050.
The other side of the trade put up $2,337,950. Spokespeople for LSU did not immediately respond to CBS Sports' requests for comment. Large athletic departments typically insure the bonus structure in coaches' contracts through third-party insurance companies.
Insurers then pass that risk on to specialist reinsurers, including well-known marketplaces such as Lloyd's of London. But a new trend to counter insurers' risk has emerged among sports insurers: prediction markets. The New York Times reported Feb. 10 that Kalshi had begun working with Game Point Capital, which CBS Sports could not confirm.
The New York Times described Game Point Capital as an insurance company that helps college athletics departments, sports teams and sponsors manage the financial risk of performance incentives written into athletes' and coaches' contracts. Game Point had historically laid that risk off through Lloyd's of London and later through American providers. It told the Times it expected to hedge roughly $30 million a year through Kalshi.
"We want to offer the most efficient pricing for teams and other clients," Will Hall, Game Point's co-founder and CEO, told the Times. Kalshi filed a rebate program with the Commodity Futures Trading Commission in January, allowing members to offset risk from insurance contracts written on sporting outcomes. InGame reported that the LSU trades in August came from a third party that helps sports organizations hedge risks such as coach bonus payments, and identified Game Point -- a Charleston, South Carolina, firm that lists the SEC, ACC, Big Ten and Big 12 among its clients on its website -- as a company known to place such trades on Kalshi.
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